French prosecutors prepare preliminary charges against Riad Salameh

Lebanon's central bank governor faces hearing in Paris on May 16 as part of cross-border inquiry into alleged embezzlement

Riad Salameh could be charged by French investigators with fraud and money laundering. AP

French prosecutors have informed Lebanon's embattled banker Riad Salameh of their intention to bring preliminary charges of fraud and money laundering against him, Reuters reported, citing judicial documents.

This adds to the mounting case against the central bank governor, who has been under increasing scrutiny in several European countries for his financial dealings.

The documents sent by the French judicial authorities to Mr Salameh ahead of his hearing scheduled for May 16 contain a new accusation of using false account statements, Reuters reported.

The agency said French prosecutors plan to bring preliminary charges and officially designate him a suspect during the hearing.

The new accusation against Mr Salameh is related to allegations that Marwan Kheireddine, chief executive of Lebanese bank Al Mawarid, falsified banking statements for accounts owned by Raja Salameh, the governor's brother.

In January, Mr Kheireddine was questioned in Lebanon by European investigators in relation to the three accounts, which produced exceptionally high returns between 1993 and 2019, growing from an initial investment of $15 million to $150 million, according to judicial documents obtained by The National.

In a letter also seen by The National, Riad Salameh's lawyer Pierre Olivier Sur told a French judge that "Raja Salameh opened accounts in his name where funds belonging to Riad Salameh were placed" because the governor "entrusted a large part of the management of his personal assets to his brother", before he was appointed at the central bank.

The account statements were provided to the French judiciary as part of Riad Salameh's defence to explain the growth his assets, Mr Olivier Sur wrote.

However, investigators have long suspected that the account statements were created only to cover up accusations of illicit enrichment.

They do "not contain any element confirming their authenticity and their non-falsification", Lebanese judge Jean Tannous, who led a separate probe into Riad Salameh, wrote in a judicial document.

In the French court document seen by Reuters, French investigators concluded that Mr Salameh "used fake records of bank accounts at AM Bank … provided by Marwan Kheireddine, to justify in a deceitful manner the origin of his properties or revenues".

Mr Kheireddine was indicted in Paris at the end of last month as part of the French investigation on aggravated money-laundering charges and participation in a criminal conspiracy.

Mr Salameh is under investigation in at least six European countries for having allegedly embezzled more than $330 million dollars from the central bank with the help of his brother.

European prosecutors are investigating the commissions paid by commercial banks to Lebanon's central bank as part of a contract awarded to Forry Associates, a company owned by Raja Salameh.

Investigators suspect Forry to be a shell company created only to channel millions to fund luxury properties in Europe.

The brothers have denied any wrongdoing.

Lebanon is in the midst of a steep economic crisis blamed on decades of corruption and squandering of public funds by an entrenched political elite.

As the head of Lebanon's central bank since 1993, Mr Salameh also came in for criticism for his role in a failed system that ultimately collapsed, leaving 80 per cent of the population living below the poverty line

$50 million in assets in Switzerland

The report of potential French charges comes after Switzerland’s Federal Criminal Court upheld a decision by the Office of the Attorney General to refuse a request to release of a portion of funds frozen in an account linked to Mr Salameh.

The decision, which was made public on Wednesday, is a rare insight into the Swiss proceedings against Mr Salameh.

Last month, the Federal Criminal Court rejected a request from Mr Salameh for complete access to the file on his investigation.

According to the court's website, Mr Salameh had lodged appeals seeking access to the complete investigation file and claimed he had not received a fair hearing.

The judges cited the complexity of the case in their decision to deny the request.

The investigation "although open for over two years, is still in its early stages, given its complexity and foreign ramifications" and requires "an analysis of the voluminous bank documentation produced, as well as investigative measures dependent on international co-operation", they said.

Under Swiss law, defendants may access the file of an ongoing criminal proceeding, to allow them to prepare their defence, but this is not an absolute right and may be restricted by criminal judges if they deem defendants are abusing it.

Public knowledge of proceedings in the Swiss investigation has been relatively limited compared to other European investigations, including the French inquiry. Mr Salameh has significant assets in Switzerland, with the Swiss judiciary having identified about $50 million in assets held by him in Swiss banks.